The Supreme Court ruled that a company’s act of requesting additional time to file a response to a complaint constitutes voluntary submission to the court’s jurisdiction, even if the initial service of summons was questionable. This decision emphasizes that actions indicating an acceptance of the court’s authority can override technical defects in the service of process. It reinforces the principle that companies cannot avoid legal proceedings by contesting summons irregularly when their behavior suggests they are participating in the legal process.

Dodging Summons or Embracing the Court: When is a Company Bound by Legal Proceedings?

This case revolves around a complaint filed by Monina C. Santos against Carson Realty & Management Corporation (Carson). The central legal issue is whether the Regional Trial Court (RTC) acquired jurisdiction over Carson, given the questions surrounding the service of summons. Summons serve as the formal notice given to a defendant that a legal action has been filed against them, thus requiring their appearance in court. Proper service of summons is crucial because it is the mechanism by which a court gains jurisdiction over a defendant in cases. Carson argued that the summons was improperly served, thus the RTC lacked jurisdiction over its person, rendering subsequent court orders, including the declaration of default, invalid. The procedural history reveals a series of attempts to serve the summons, raising questions about the validity of the service and Carson’s response to these attempts.

The Court of Appeals (CA) denied Carson’s petition, finding that the RTC properly acquired jurisdiction due to Carson’s voluntary appearance. The appellate court emphasized that Carson’s act of requesting additional time to file a responsive pleading constituted voluntary submission to the court’s jurisdiction. It also noted that even if there was no voluntary submission, the RTC still acquired jurisdiction due to the substituted service of the alias summons. Substituted service is a method of serving summons when personal service is not possible; it involves leaving a copy of the summons at the defendant’s residence or office with a person of suitable age and discretion. The CA reasoned that the receptionist who received the summons was a competent person authorized to receive court documents on behalf of the corporation. This led to upholding the RTC’s order declaring Carson in default. Essentially, this means Carson was considered to have waived its right to present a defense due to its failure to respond to the complaint within the prescribed period.

The Supreme Court affirmed the CA’s decision, holding that the RTC had indeed acquired jurisdiction over Carson. The Court found that the requirements for a valid substituted service of summons were substantially complied with. The officer’s return detailed several attempts to serve the summons on Carson’s officers, which proved unsuccessful. Consequently, the summons was served on the receptionist, an employee of the company. The Court took note that there seemed to be a deliberate plan for Carson’s officers to avoid receiving the summons, an action the court would not condone. The court gave importance to Section 11, Rule 14 of the Rules of Court which provides the specific people to whom summons can be served to within the company.

SECTION 11. Service upon domestic private juridical entity. – When the defendant is a corporation, partnership or association organized under the laws of the Philippines with a juridical personality, service may be made on the president, managing partner, general manager, corporate secretary, treasurer, or in-house counsel.

Moreover, the Court emphasized that even if the substituted service were invalid, the RTC had already acquired jurisdiction over Carson through its voluntary submission to the court’s jurisdiction. This principle is rooted in the idea that a defendant’s actions can indicate consent to the court’s authority, regardless of any technical defects in the service of summons. Philippine Commercial International Bank v. Spouses Day provides that:

As a general proposition, one who seeks an affirmative relief is deemed to have submitted to the jurisdiction of the court. It is by reason of this rule that we have had occasion to declare that the filing of motions to admit answer, for additional time to file answer, for reconsideration of a default judgment, and to lift order of default with motion for reconsideration, is considered voluntary submission to the court’s jurisdiction.

The Court underscored that seeking an affirmative relief is inconsistent with the argument that no voluntary appearance had been made. By requesting additional time to file a responsive pleading, Carson effectively acknowledged the court’s authority and submitted itself to its jurisdiction. Therefore, even if the summons was not properly served, Carson’s actions demonstrated that it was submitting itself to the jurisdiction of the Court. Because of this, the Court emphasized that the RTC was correct in its declaration of default.

FAQs

What was the key issue in this case?	The key issue was whether the RTC acquired jurisdiction over Carson, given questions about the validity of the service of summons and Carson’s subsequent actions.
What is ‘substituted service’ of summons?	Substituted service is a method of serving summons when personal service is not possible, such as leaving a copy at the defendant’s residence or office with a competent person.
What does it mean to be declared ‘in default’?	Being declared in default means that a party has failed to file a required pleading or response within the prescribed time, resulting in a waiver of the right to present a defense.
How did Carson Realty & Management Corporation argue its case?	Carson argued that the summons was improperly served, therefore the RTC lacked jurisdiction over its person. This is because the proper procedure in serving summons to juridical entities was not followed.
On what grounds did the Supreme Court deny Carson’s petition?	The Supreme Court denied Carson’s petition because the company had already submitted itself to the jurisdiction of the court, and the act of requesting an extension was indicative of this.
What constitutes a ‘voluntary appearance’ in court?	A ‘voluntary appearance’ occurs when a party takes actions indicating an acceptance of the court’s authority, such as filing motions or pleadings seeking affirmative relief.
What is the significance of requesting ‘affirmative relief’?	Requesting ‘affirmative relief,’ such as additional time to file an answer, signals to the court that the party is actively participating in the legal process and submitting to the court’s jurisdiction.
What is the practical implication of this ruling for corporations?	The practical implication is that corporations must be aware that their actions in court can indicate consent to jurisdiction, even if there are technical defects in the service of summons.

This case serves as a crucial reminder that companies must carefully consider their actions in court proceedings. Even if there are concerns about the validity of the initial summons, any actions that imply acceptance of the court’s authority can result in the court acquiring jurisdiction over the company. This can lead to serious consequences, such as being declared in default and losing the opportunity to present a defense.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Carson Realty & Management Corporation vs. Red Robin Security Agency and Monina C. Santos, G.R. No. 225035, February 08, 2017